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Amid the escalating demand for CBD in the United States, many companies are selling “hemp extracts,” a strategy based on regulatory and scientific considerations. Marketers of hemp extracts must distinguish their products from the compound (CBD) under investigation by GW Pharmaceuticals plc, which announced Thursday that an FDA committee unanimously recommended supporting approval of its new drug application for Epidiolex.

Editor’s note: This is the seventh in a series of articles examining regulatory hurdles facing cannabidiol (CBD) producers and marketers in the dietary supplement industry, and ongoing efforts to comply with federal regulations. Click the following link for the sixth article in the series.

With a license to grow, distribute and sell marijuana in Canada, Emerald Health Sciences explored expansion into the U.S. nutraceuticals market with cannabidiol (CBD).

Ultimately, the public company decided not to sell CBD in U.S. natural products after meeting with two law firms specializing in cannabis law.

“They gave us two bits of advice, and the advice from both firms was identical,” said Jade Beutler, CEO of Emerald Health Bioceuticals, a San Diego-based subsidiary of Emerald Health Sciences. “Number one, don’t do it. And number two, if you do it, don’t say you’re doing it. And interestingly, you’ll see the CBD companies now shifting from CBD to what they’ll call a whole hemp extract or something of that nature.”

During an interview at Expo West in Anaheim, California, Beutler described the shift of existing CBD companies as a “duck, dodge and deflect strategy as the FDA and DEA continue to put the squeeze on.”

Amid the escalating demand for CBD in the United States, many companies are selling “hemp extracts,” a strategy based on regulatory and scientific considerations. Marketers of hemp extracts must distinguish their products from the compound (CBD) under investigation by GW Pharmaceuticals plc to treat rare forms of epilepsy because FDA has essentially concluded GW’s drug trials exclude CBD from the definition of a dietary supplement.

Epidiolex, if approved by FDA, could hit the U.S. market in the fourth quarter of 2018, according to some Wall Street analysts. GW on April 19 said an FDA advisory committee unanimously recommended supporting the approval of its new drug application for Epidiolex for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome in patients two years of age and older.

FDA has concluded CBD is excluded from the definition of a dietary supplement under the Federal Food, Drug & Cosmetic Act (FDCA) because it has been authorized for investigation as a new drug and is the subject of substantial clinical investigations that have been made public.

Hemp industry professionals suggested whole plant hemp extracts are not only distinguishable from the compound under investigation by GW Pharmaceuticals—and consequently not subject to the clause in federal law that excludes drugs from being sold in supplements—but they offer greater health benefits than CBD as an isolate.

Drug companies like GW will be “using single molecule compounds of cannabis to create a pharmacological drug for a specific ailment or injury or syndrome,” said Tim Gordon, president of the Colorado chapter of the Hemp Industries Association (HIA).

Gordon also is president of Functional Remedies, a Boulder, Colorado-based marketer of CBD hemp oil. “In our products, we don’t call out the amount of CBD,” he said. “We call out the amount of phytocannabinoids.”

In a 2017 interview, Ashley Grace, then chief marketing officer of Denver-based CW Hemp, cited research in Israel describing the “entourage effect.”

The idea is a plant’s various compounds “work synergistically together to deliver an outcome as nature has created them,” explained Grace, who no longer is employed with CW Hemp, “and that’s always going to outperform any Western medicine-derived specific compound that we may take out of nature and try to apply …. as a drug.”

The market for CBD—and hemp extracts—has grown precipitously over the last five years since CNN’s Sanjay Gupta profiled Charlotte Figi, a Colorado girl diagnosed with a severe form of epilepsy: Dravet syndrome, one of the medical conditions GW’s Epidiolex has been developed to treat.

Charlotte’s mom decided to try medical marijuana for her then 5-year-old daughter, CNNreported in 2013, after the child’s medical condition deteriorated to the point that she suffered hundreds of seizures a week and could not eat, talk or walk.

Ultimately, the family started using a strain of medical marijuana high in CBD and low in tetrahydrocannabinol (THC)—the psychoactive compound in marijuana—from dispensary owners known as the Stanley brothers. The seven brothers from Colorado founded CW Hemp, and in 2012 developed the genetics for Charlotte’s Web.

Louisville, Colorado-based Bluebird Botanicals entered the CBD market in late 2013, the same year CNN reported Charlotte Figi was “thriving” thanks to the Stanley brothers’ CBD. According to Bluebird’s Chief Brand Officer Michael Harinen, the company began using CBD prominently on its label and standardized its products for CBD content.

The reason: CBD was what consumers were looking for.

In 2015, FDA declared in a Q&A (last updated in August 2017) that CBD could not be sold in dietary supplements. Its statement, reiterated in 2016 and 2017 warning letters, contributed to the shift in recent years to sales of hemp extracts.

Bluebird, Harinen said, began to produce hemp extracts that were standardized for total cannabinoid content rather than just CBD.

From a marketing standpoint, he acknowledged the challenges of not highlighting the CBD content in Bluebird’s products. On the other hand, he said Bluebird seized the moment to educate customers about the benefits of a whole plant hemp extract.

According to Bluebird’s website, its “Classic Hemp CBD Oil” contains more than 80 different phytocannabinoids. Other substances naturally present in Bluebird’s hemp extracts include amino acids, carbohydrates, vitamins and fatty acids, the company says.

“We still have customers [who] come to us with that distinction [between hemp extracts and isolated CBD] not clear in their minds, and we help them in that process,” Harinen said. “But for the most part … I would say most customers are pretty savvy to the fact that it still contains high levels of CBD.”

Grace acknowledged the hemp terminology was confusing to consumers.

“A lot of people call us CBD, but we’ve been really … working hard to be true to what we are,” he said, “which is a whole plant hemp extract—much to the detriment of our business because it confuses a lot of people.”

“If my dietary supplement is a hemp extract, I’m calling a lot less attention to myself than if I use the exact term that FDA’s already publicly stated doesn’t qualify as a dietary ingredient in a dietary supplement,” he said.

Once FDA approves Epidiolex, Grace said in the 2017 interview, CW Hemp anticipated companies “will be forced to stop marketing CBD” and “stopped from operating because you can’t put the genie back in the bottle.

Regulatory lawyers cautioned the marketing of “hemp extracts” does not necessarily insulate a company from FDA enforcement action, especially if the CBD in a product exceeds the naturally occurring levels in the hemp plant due to the manufacturing process.

“If you’re showing elevated levels of CBD, that means you’re manipulating the product for CBD content,” said Marc Ullman, of counsel in New York to the law firm Rivkin Radler LLP.

Said Todd Harrison, a partner in Washington with the law firm Venable LLP: “When I’m talking about full spectrum, I mean full spectrum. It means that all the natural constituents of the hemp plant are in there at the same percentages as they would be found in nature. You have not manipulated the percentages at all.”

In a widely reported decision in 2000, a federal appeals court wrote, “To permit manufacturers to market dietary supplements with components identical to the active ingredients in prescription drugs would, as the FDA points out, contravene the incentive structures in place in the FDA for the development of orphan drugs and pediatric drugs.”

That a “hemp extract” may include other cannabinoids besides CBD won’t resolve FDA’s concerns if the amount of CBD detected in the product is higher than what’s found in nature, Ullman suggested.

“It’s like red yeast rice,” he said. “You can have … naturally occurring lovastatin at extremely low levels, and also have other statins in there that are naturally occurring … in the red yeast rice. And just because you have those other statins present that are naturally occurring doesn’t save you if you also have elevated levels of lovastatin.”

Martin Lee is director of Project CBD, a nonprofit organization in California that promotes research into the medical uses of CBD. He noted concentrations of CBD in cannabis plants can differ greatly. Plants in California are bred to contain about 20 percent CBD, he stated, while hemp from Australia and Europe contains as little as 3 percent CBD. He suggested hemp plants grown in Colorado, Kentucky and Oregon contain between 8 and 12 percent CBD.

Asked what he considers a hemp extract, Lee responded, “That means whatever they’ve drawn from the plant, they haven’t processed it to the degree that it’s just an isolate. That doesn’t mean that it’s a particularly good product or bad product, or it’s a clean product or a tainted product.”

Stuart Tomc is vice president of human nutrition with CV Sciences Inc., a company with offices in Las Vegas and San Diego whose PlusCBD Oil is sold at natural products retailers across the United States.

He described what it means to market a full-spectrum hemp extract.

“You need to absolutely, positively demonstrate that there is more than cannabidiol,” Tomc said, asserting PlusCBD Oil contains several different cannabinoids in measurable amounts.

Hemp extracts must contain “a large amount of plant material relative to the CBD, and they must list that they contain other cannabinoids,” he added. “This is the only way that a consumer will know that it’s a full-spectrum … plant hemp extract and not an isolated CBD product.”

Companies have used different generic language to describe hemp-based products that contain cannabinoids.

Enter EuroPharma Inc.’s Terry Naturally Vitamins in Green Bay, Wisconsin. According to the Supplement Facts panel for “Terry Naturally Hemp Oil,” the product supports the body’s endocannabinoid system and contains (among other things) concentrated European hemp stalk and seed oil.

In a “frequently asked questions” section online regarding the amount of CBD in Terry Naturally Hemp Oil, the company explained, “We do not make claims regarding cannabidiol … The FDA has called out companies for making claims for CBD on their websites, labels and literature. However, hemp and hemp oil remain legal.” Terry Naturally said its hemp oil contains less than 0.3 percent THC.

Harrison suggested labeling a product “hemp oil” would be problematic if it contained CBD.

“If you went to the grocery store and took a pure hemp oil and you tested it, you wouldn’t find CBD in it,” he said, adding, hemp oil derives from the seed.

Lee of Project CBD—and others, including DEA—have said CBD predominantly comes from the flowers of a hemp or marijuana plant.

FDA declined a request to answer specific questions for this article, including whether it believes “hemp extracts” containing CBD and perhaps other cannabinoids are excluded from the definition of a dietary supplement under the FDCA.

In an interview at Expo West, EuroPharma’s Cheryl Myers—head of education and scientific affairs—discussed the regulatory landscape.

“As we all know, the Food and Drug Administration can change its mind in a heartbeat,” she said. “But as we understand the regulations now, and as we understand the regulatory concerns about natural products calling out compounds that are being designated as prescription drugs, or dietary supplements that don’t meet the federal guidelines of less than 0.3 percent THC … yes, we have followed everything to a T.”

Others have been less vigilant.

FDA lab results have found products containing CBD often do not contain the levels of CBD declared on the label. Additional third-party research has led to further questions of misbranding, including whether certain products labeled as hemp extracts contain only one cannabinoid in measurable amounts: CBD.

Harrison said a product labeled as a hemp extract but consisting entirely of CBD would be in violation of federal law.

“It doesn’t matter whether it’s safe or not,” the lawyer said. “It’s just adulterated as a matter of law.”

Moreover, he said such a product would be misbranded.

“Any misrepresentations about the content of a product is potentially going to be problematic,” Carvajal observed. “If you say, ‘Contains X, Y and Z,’ and it only contains X, that’s a problem, especially if the consumer would ascribe a lot of value to Y and Z, which happened to be missing.”

Finally, Lee said failure to disclose the amount of CBD in products sold as dietary supplements is not in consumers’ best interests.

“People need to know what’s in there,” he said. “They need to be able to tell their doctor, ‘This worked for me, or this didn’t,’ and the doctor needs to know … how much CBD worked or didn’t work so they can augment the therapeutic regimen.”